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Open Session Oral Presentation Speaking Notes
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by Jim Davis,
Program Coordinator, Africa Partnerships,
KAIROS: Canadian Ecumenical Justice Initiatives
As Program Coordinator for Africa Partnerships at KAIROS: Canadian Ecumenical Justice Initiatives, a coalition of 11 churches, I want to thank the organizers of this open session process for the opportunity to make a few brief remarks at these roundtables on behalf of the absent partners and voiceless communities affected by Canadian resources extraction in Africa.
If this roundtable exercise aims to home in on “potentially actionable ideas on how government, industry and civil society can work together to enhance corporate social responsibility performance of the Canadian extractive sector operating in developing countries,” it is essential for all involved to refer to the June 2005 report of the Standing Committee on Foreign Affairs and International Trade (SCFAIT), on mining and corporate responsibility. KAIROS fully supports the ten recommendations from this all-party committee, and urges the government to move towards their implementation in order to fill the governance vacuum that currently exists. As the cases highlighted by other speakers this evening have clearly shown, mandatory standards for Canadian extractive companies overseas are long overdue.
This evening I would like to focus on 2 actionable items from the SCFAIT report:
- Free, Prior, Informed Consent (FPIC); and,
- The Canada Investment Fund for Africa (CIFA).
FPIC. In early April of this year KAIROS convened a forum
on Free, Prior, Informed Consent – FPIC – with member
churches, Canadian civil society and Southern partners. During their
visit to Canada for the forum, some of the KAIROS’ Southern
partners had the opportunity to meet with Natural Resources Canada
Deputy Minister Richard Fadden. In this meeting, a representative
from the African Initiative on Mining, Environment and Society (AIMES),
conveyed to NRCan that, among other things, locally affected
communities must have the authority to decide on resource extraction
activity. This right of free, prior and informed consent (FPIC)
is recognized internationally in the UN Declaration on the Rights
of Indigenous People, which was adopted earlier this year by the
UN Human Rights Council despite the Canadian government’s
objections. The SCFAIT report highlights the importance of the Declaration,
and we echo the call to consider the Declaration and the rights
enshrined within it, such as FPIC, as you move ahead with this process.
CIFA. Secondly, I would like to turn your attention to Recommendation
No. 2 in the Standing Committee report, which urges Canadian government
support to extractive industries to be conditioned on companies
meeting CSR and human rights standards. In the case of Africa, this
brings to mind the Canada Investment Fund for Africa (CIFA), which
provides risk capital for private sector businesses in Africa, including
in the extractive sector. It grew out of Canada’s commitments
to Africa at the Kananaksis G8 Summit in 2002, and includes C$100
million of Canadian taxpayers’ funds. KAIROS and other members
of the Africa Canada Forum, a working group of CCIC, have been requesting
more transparency around the CIFA and any social or environmental
criteria to which it subscribes.
Among its African extractive sector investments, in 2005 CIFA invested US$11 million in Banro Corporation, a TSX-listed junior exploration company with licenses in the eastern provinces of South Kivu and Maniema in the Democratic Republic of the Congo (DRC). Eastern DRC has a notoriously troubled history of combining resource extraction, human rights abuses and so-called “militarized commerce”. KAIROS knows of these problems directly from Pascal Kabangulu, Executive Director of the Bukavu-based Héritiers de la justice. A longtime human rights defender, he knew much about illicit mining activites by authorities in South Kivu province. In August last year, Pascal was assassinated in his home, in front of his family, and his traumatized wife and children now have refugee status in Canada. Those believed to have committed this act in the military and local government have still not been brought to justice within the culture of impunity that reigns in this fragile, if not failed, state.
This is the climate in which some CIFA investments are being made. Management of the CIFA has been contracted out to Montreal-based Cordiant, a portfolio manager owned by the Ontario Teachers Pension Plan, and the UK-based Actis, a private equity investor in emerging markets. But it isn’t clear whether the Canadian government has defined clear CSR standards for this private sector investment fund.
Indeed, the portfolio managers, Actis and Cordiant, make claims that investments are screened for environmental and social sustainability. It doesn’t appear that any of those findings are made public. The 2006 audit of Actis’ Business Principles could offer no guarantee of CSR standards by investee companies, as no overseas visits were made. The 2005 independent review of Actis’ progress in implementing its Business Principles by the Ashbridge Centre for Business and Society found that Actis’ internal screening procedures were not always followed, and that when followed, Actis could only encourage operating unit CSR where it has influence, which it apparently doesn’t always enjoy. In the case of the DRC, simply following the country’s industry-friendly 2003 Mining Code is not good enough.
This example illustrates why CSR conditionality, public accountablity and transparency must be introduced on this Fund and all other forms of Canadian government financing and support to the extractive sector, as recommended by the Standing Committee.
Thank you.
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